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The ‘only lever’ SMSFs have left to pull for tax time

Tax time

As the end of the financial year approaches, there’s only one lever SMSF investors can pull to improve their position, a global portfolio strategist has said.

Speaking to Nest Egg, State Street Global Advisors global portfolio strategist Thomas Reif said SMSFs should be looking at their capital gains in a big way.

“The only lever that you can pull at this time of year is your capital gains lever and you should pay attention to that and you should do it tonight when you read this article. You only have until the 30th of June to do a trade to realise whatever capital position you want to this year,” Mr Reif said.

He said investors should be considering their capital gain or loss position, and factoring in the different tax lots. Tax lots are the way different purchases of the same security are recorded.


“You might've purchased the same share or the same ETF or the same individual security at different prices through time. Some of those might be at a loss, some of those might be at a gain and it doesn't matter whether they're all at a loss or all at a gain, coming to this time of year you want to realise your losses,” Mr Reif said.

He said there’s no debate about whether losses are worth more realised or deferred, “don’t argue with me”, and this comes down to the opportunity provided by realised losses to offset gains.

“Once you've realised the losses, you can reinvest in that underlying security… you can reinvest to maintain your exposure in due course,” Mr Reif said.

“Generally always you want to realise any losses that are in your portfolio and this time of year it's too late to talk about franking credits… At this time of year you only have time to manage your capital gains considerations.”

The ‘only lever’ SMSFs have left to pull for tax time
Tax time
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